The standard cost of product B manufactured by TLC company includes 3 unit s of
ID: 2352383 • Letter: T
Question
The standard cost of product B manufactured by TLC company includes 3 unit s of direct materials at $6.75 per unit during June 28,000 units of direct materials are purchased at a cost of $6.35 per unit and 28,000 units of direct materials are used to produce 9,000 of product B.
Compute the totals material variance and the price and quantity variances and list whether favroable or unfavorable
REpeat this question with assuming the purchase price is $7.02 and the quantity purchased and used is 26,200 units.
Explanation / Answer
Actual quantity = 28,000
Actual price = 6.06
Standard price = 6.45
Standard quantitiy = 9,000*3 = 27,000
Materials price variance = Actual quantity*(Actual price - Standard price) = 28,000(6.06 - 6.45) = -10,920, which is 10920 favorable
Materials Quantity variance = Standard price*(Actual quantitiy - Standard quantity) = 6.45(28,000 - 27,000) = 6450, which is 6450 unfavorable
Total direct material variance = materials price variance + materials quantity variance = 10920 favorable + 6450 unfavorable = 4470 favorable
Answer:
Total materials variance $4470 favorable
Materials price variance $10920 favorable
Materials quantity variance $6450 unfavorable
Question 2:
Actual quantity = 26,200
Actual price = 6.71
Standard price = 6.45
Standard quantity 9,000*3 = 27,000
Materials price variance = Actual quantity*(Actual price - Standard price) = 26,200*(6.71 - 6.45) = 6812, which is 6812 unfavorable.
Materials quantity variance = standard price *(actual quantity - standard quantity) = 6.45(26,200 - 27,000) = -5160, which is 5160 favorable.
Total materials variance = 6812 unfavorable + 5160 favorable = 1652 unfavorable
Answer:
Total materials variance $1652 unfavorable
Materials price variance $6812 unfavorable
Materials quantity variance $5160 favorable
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